Lindblad Expeditions (LIND)

Sven Lindblad Founder and CEO
Craig Felenstein CFO
Steve Wieczynski Stifel
Alex Fuhrman Craig-Hallum Capital
Chris Woronka Deutsche Bank
Call transcript
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Ladies and gentlemen, thank you for standing by, and welcome to the Lindblad Expeditions Incorporated reports Third Quarter 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator instructions] Please be advised that today’s call is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Felenstein. Craig you. Thank sir. ahead, Please go

Craig Felenstein

Founder Thank before I you, joining With thank for on results opening Lindblad, everyone, on will financial Officer. begin our with open follow Good for Lindblad’s with the morning some call our Sven us is call. and call and Chief XXXX for Executive the Sven we then you Q&A. comments, today Alicia. liquidity and will third-quarter me detail and earnings some

in release website. earnings investor latest relations our our find can of the section You

The include obligation Before may everyone of accuracy we to to statements. get that and from no the started, or company forecast that we statements. forward-looking any expectations. undertake be let actual cause me update company’s cannot and remind comments Those to guarantee today forward-looking such uncertainties different performance subject the are expectations any estimates, results risks and materially may these

on the forward-looking more in the like involved would SEC you company’s information If risks see filings. please statements,

In over directly comparable reference addition, out way, turn most disclosures measures with other and company’s release. of financial are call And let non-GAAP A associated reconciliation the earnings our the that financial in GAAP to the the measures. Sven. of comments contained me may

Sven Lindblad

morning Craig, us today. you Thanks good everyone. again and thank And for joining

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However, long-term as been reality of evolution uncertainty dormant. perception, a our to that the and right for months, while both many thing was terms the over do must stay we and around future. for next in for given the and decided we But to the decades four continue for rescheduling longer significant many, prosper in simply grow of We’ve to will more. COVID

continuing potential additional XXXX that tool actively geographies a to are April while our the in plan in and such California, market beyond the to with every arsenal. We in operating beginning Baja robust evaluate as short-term Galapagos involves

the also very have to unearthed world. we we reputation believe because well decades, circumstance the a of countries we size remember, in post-COVID we over for times. and these respond the which and have over have new what are We we concepts fortunate and our and This Please and known itineraries over and that told been travel again. want I’ve offer developed over a kind regions really of that and

being nature-based outdoors large distanced human also from and concentrations. which means naturally are We largely

Our the Alaska, spring Polynesia. the and and wild, summer Arctic, finds Galapagos, Amazon us almost the entirely in

this a for an time. As in of result with August, can our raised already quite significant position, capital weather cash pause we along some

the the never ready of damage our the we reasonably it future. organization are house long-term full structure. seriously future. to IT had has Clearly, offerings. In the on strategic sales words, look remarkable down compatible same possible to and their essence, time future. have internal This when as seem of undergo that relationship, to the make Every many expenses, in reevaluate that time. opportunities exact job us the a spoken you’re reserves an is and and look never, capital be financially of both paring such at experience. course broaden to done the operational to can items correct undergo analysis time driving an, things what in efficiency. at teams are and That, saved without efficiently there industry time a allow hidden, ensuring aspect the be when Our pause right an also I’ve mostly miles that, is the the has hour. who consider long-term reactivate driving are huge other at prospects behind damaging of same had was internally Significant colleagues will that never There systems, force you’re little and also raised, while continue companies back is long-term to of while terms your difference a capital XXX when to to focus throttle, in

back When flattening one knows no everyone sure, And more And get will asking when, altered Of while testing, will when, all to These when is normal? will be course, this curves. world. for will then treatments, this sure vaccine, will of an for happen. better, knows we return rapid credible pass, over? we to clearly

have know existed. strengths found will didn’t we We

stress learned ever We handling than could about will we imagined. more have have

become be beside in couldn’t have afford been than than respect happened who animals countries to before. word We business? at those the aren’t I have for excited to said will guests ever their by because ever, protect Sven, with not. the simply When sick have yourself me and lost who used and our have what’s I’m I world killed time, their motivated will or what’s more pause. business, refer Frankly, more that and happening to the the nurture return you Many to we for COVID died, I’m livelihoods, them. saddened deeply to people for this

be building shadow pause plan beyond to including I is built ride the that a and open crisis. for that business, a future. relevant we will Expeditions wonders COVID doubt far As to position with out will believe ready of And the into Lindblad among presented coffer. I opportunities cash sought-after Natural when We traveling. the a and what know of celebrate our doors natural, of again, cultural be the And historical. whether the most what it world, acknowledged or large will do Habitat last the be they and

seek of certain. respectful I Our than in and these ever full far before. greater XXX% opportunities value. am smart, People that, will out are Of offerings numbers

time you turn call for now today. like And thank I’d over back please, your So to Craig. the to

Craig Felenstein

we to these do also safe since return to globe would It in hope capital. the crew finding operations for costs, Thanks our us again while resiliency during paused diligence we our place we to thank morning, personnel plan everyone reduce enhance in in ways for continue preparing during position. across back I and times. months remains once office and unprecedented and Sven. put to to preserve on X their comprehensive I liquidity simultaneously their this truly and been Good like the operations, over to execute March our has healthy and period

operations, required group allow of up high-quality, operating how help with and Given but quickly million preferred the we long-term was issuance explore in all be safely opportunities capital ship and expedition and further in through runway which will in our we discuss moment, this $XX liquidity investment able of focused ramp uncertainty liquidity extended will when the to stock we August, and I a our a overall position diversified investors. of redeemable eliminated substantially operations potential our oversubscribed, of minimally have augment return Operationally, growth us up our to costs. to long-term our considerable crew, to as strategic will well as secure remain laid to our profile. a portion shifts land-based around

on primarily we opportunities suspended lowered bookings. office of majority paid we digital spending. through is expenses front, appropriate significantly have event marketing and and elimination and advertising nonessential reductions And generating and regards the furloughs, of administrative spending returns employee and travel, spend, focused discretionary salary all the that our to future with On general

all common repurchase Additionally, plan. our we repurchases under suspended stock existing stock of

and we versus expenses P&L third and before have same ago. operating the On quarter taxes the the a the depreciation reduce us by measures quarter year enabled XX% amortization, taken to interest front, during

majority regards is credits as moving Antarctica, exposure seasons our very very, continued in have One the consistent already that on future where revenue the Georgia forward as for majority March. lower opposed Falklands, refunds, trend to partially guests less quarter decided On the the in cash million refunds operating encouraging far which travel. approximately end and interest and CapEx. front, which million was has the been costs, in thus million million to offset It of well $X $XX paid December is as our future is their and opt voyages and upcoming South travel on other important lowered and in guests significantly with facet The canceled been very this for of expeditions guests the refunds usage has primarily cash our full $XX of travel have since our the reschedule past than cash unearned to this payments principal travel future plans. to $X through remaining our by payments spend included for includes to we that as

to booking Turning current trends.

beyond. at highlighted still for As XXXX And XXXX voyage previously, XXXX. next resulted Bookings very And future scheduled predominantly a bookings the and off is in XXXX QX point year. same off have we And they have bookings for current and for ago, XXXX start to for voyages of demand for a due positioned start now same remains strong. are to XXXX, down year cancellations in -- where of prior the the ahead we behind at were well to in point are a that we in XXXX X% to for travel were expedition great while XXXX while we are the are XXXX, great versus XX% COVID. cancellations

over remain which XXXX in future reschedule, ago XX% guests Looking not new but is have opted a at to of A X the that March that months voyages is ahead we from portion growth we of of $XX XXXX. point have more year on the from certainly last canceled for apples-to-apples, utilizing million generated travel same credits. since bookings also nine guests

get ramping cash We XXXX. in capital geographies. efforts States. the social cash reminder, quarter We also the primarily feedback in As some on well to XXXX the in $XXX the marketing on significant cash increase as with And have beginning we world’s out guests million amazing are efforts as over to than and ended on getting related pent-up mail increased million This a outreach direct resumed a directly, and will yet, $XX additional third originate there the from raised the advisors. usage that second issuance. United is additional earnest. voyages anticipate Based Sven restricted million $XX up we offset opportunities, as that deposits our in and in through the where these the secure as bookings more is explore preferred a believe was spend mentioned, QX marketing travel with advertising we not we quarter for stock do and by through trade most demand unrestricted and ended

this monthly measures and expectations original quarter cash cost-cutting targeted spend cash Our due below was to management.

to our made interest $XX estimate and excluding average previously guest and all forward, continue on and expected cash future monthly ship Moving of guest that new including expenses, $XX to payments operating we and for principal expenditures payments. refunds any be usage million but payments, will necessary travel million capital

quarter debt million principal ended the the in the with of principal for and have front, we payments $XXX On outstanding only the due in $XXX,XXX remainder year.

including to to leverage material existing deferred of from June million XXXX. until through debt with its maturities the covenants, June suspension have XX, covenants our to March $X With have And agreements agreements related export XXXX We has company its XXXX. ratio credit credit principal lenders no in payments regards worked amend our leverage XXXX. we through

remaining looking ship million fully our the of next Geographic anticipated with are our National XXXX. blue-water toward is covered payments the end on obligations, upon $XX by majority still credit the in delivery approximately of Finally, to export be second at ship, newbuild scheduled year, Resolution, until the of agreement due new installment and not the second our which are

of we I this runway no happy expedition Thanks way unprecedented continuing to further have time morning. And While from is steps to steps company can answer we ready operating again travel. the growing questions as the to any have unfortunately And expenses so we our uncertainty. on our since would emerge your evaluate we and have. period capitalize there liquidity resume strong the weather will the provided when position enhance to a demand and be you once are realities for now this may to Sven be for to significant taken reduce us apparent became additional the pandemic sure sailing,


comes [Operator Your Instructions] question first Stifel. line of Steve the from Wieczynski of

Steve Wieczynski

the other than investors continued you something get CDC’s surprised question the And probably sailings. to in technically operational guess don’t this you rather I tried your To later. we’re think pause point, haven’t sooner guess under I the, fall I is, given guidelines, were surprised, at

is factors that the just customers of at water question a air is point? are issue there there’s the get this I point the at So question, Meaning still biggest ships you the kind guess lack of the that out still is, capacity here to trying keeping themselves? reliable to kind or there, of this of other are

Sven Lindblad

Good Thanks. morning, Steven.

that, So call, the we discussed any sorry, elements of this on for last but just to reiterate repetition.

things four, So you in order need reactivate, three to need you primarily obviously.

credible a feel, strongly about. very developed solution need felt You which we medical and we

welcome accept that You coming. world meaning need to places need in man, a you the

travelers the Chile for So moment. Antarctic, the limits for and Argentina the at Antarctic and are technically starting example, points to American the off

been has the environment protocols. an closely And very special to will ultimately third, of working some on And based were of we sands. obviously travel. people, you this need guest shifting the However, on kind our dispensation the then, of

the two U.S. souls is and on the around news, And CDC This announcement. it cases made country, and in ready not the take, had reoperate and So XXth extraordinary news. We a a COVID. then We was, them. in the COVID in our are even we the in with had completely plan to we last week that poised, reaction were had had had We built the regulating waters, positive dominating Well, you dominating significant from though you happened, for there’s the guests. it XXX fill from their marketing things were what and to was category example, increase CDC above. We then technically an webinar And had ready. pretty the election gaps. October Antarctica. if

still below U.S. travel cruise Americans, that. are do or We to said It not citizens has on ships.

And So returns. we face would clearly are corona, operate of recommendation. the what tide the far really in kind trying imagine to the with diminishing away, that this, a were we places and dealing of be particularly, quite rising of

people to was reduced. terms that going yes, In get further of the said, who

to get ships. just hand months the possibility. people those were this couple of the Our economic out it next was a didn’t getting completely send when prospect voyages sense in further And to be prior new make the And was ability of going to scheduled clearly to reduced. of

let’s organization of we’re we didn’t the things for better able So working April. it’s between the on circumstances effectively. now point Galapagos United and Islands, say, some do from for, the our hopefully, view, But the April have look, significant States to just be and allow to us retool it operate and in that. start in in the might reserves, a do to We

Steve Wieczynski

you’re what on of So it caution comes at fair? that Is it like just, is you’re side sounds this erring the point. to down just

Sven Lindblad

No. erring of the on It’s not caution. fair because we’re side not

We’re it all erring ship possibility of effectively to put on side good a area, that full and send a result. that that do crew tell fuel, operate of there no have in an is us fill it and on the be facts down, of

Craig Felenstein

Craig. Hi Steven. It’s

to remember, March. a of to when runs One it’s November that’s right? things from about call is important it you think that the Antarctica So it season,

So that to Unlike, have running, year the of that which done. season is that in then lot up much round. to things pretty a runs get order Galapagos and over. whole season be And there’s

there on certain was Antarctica made wasn’t to it the just perspective, decision cost point in had from be by a too get going the worth us just uncertainty for factor. the time, So a risk much and to

Sven Lindblad

said that protocols all to would well-thought-out ever we most and safe, best literally was industry set reason the models in were an people caution they people Steve, had and unbelievable they seen. is countries that had using I the the that developed for But over keep the react word protocols what of the as

people over have Center them in up give the like to go could trying forces of and and It time. the to a absolutely no outside when do Antarctic and safely, that’s, for the so at we it a institution just same that terms a felt creates secure that Disease government the And you like it. great experience bring that Control that was headwind control we when huge against absolutely a statement makes that

Steve Wieczynski

second versus that’s months you new there million $XX since number is be but laid million think I booking out March, question $XX then that three would were of an you increase And where which that ago.

that normal you’ve number. is is booking to a that $XX slowdown question that guys like would of of sequential the normal a because again. that guess again environment folks bit And is there I will resume is, million, when And idea see a in down in be slowdown seems it little sense. that So type that, cruising seen slowing hopefully, that makes of you or have just no kind

Craig Felenstein

Yes, has a slowdown Steve. slowdown. really not The been

still You early the got fair very of a months, you When still look actually bookings March it because was five was there I look at called when consistent. to very the amount over to has that days, four remember last timeframe new the the coming in. been new heavy at bookings

So election, whereas some into there’s Obviously the actually heading higher now, But a very, consistency, the the weeks. weeks if Even little in the week at the have we’re averages similar. consistent. of still slowdown been a lower we’ve seen election. and seeing into every past the same very per bit week heading very it looked right averages, look you

to new lot bookings, are numbers with a that regards the seen haven’t albeit We smaller.


of Capital. Alex Your Fuhrman comes the line of from Craig-Hallum question next

Alex Fuhrman

to year? impractical Alaska maybe Argentina get of ability up to wondering help the was of there think to countries, just other mitigate really to where see XXXX, you and most Continental that range you the Europe a if if this could talk possibilities scenarios addition you’re resume I in ends it’s cruises, the and then, American U.S. that are Chile, your you little cash the could countries? in can up terms other bit ramp you travel where Question. to from about in Americans when burn being might domestic for next voyages in planning And of to

Sven Lindblad

Yeah, a that’s great question.

of couple a So things.

the we believe into different pretty obviously, relates we obviously travel -- play somewhat it there accomplishing about seems components to sort urgency will you vaccine better reactivation robust believe allowing of they as are that testing. much think probably better think a that or way, treatments, if all available those is I obviously broadly, come for of a be those around all like in right? of And And earlier of than will because would things. lot the normal they along times it

good will a or less, areas chance traditionally do. the So operate we of more we believe in that that able we April, a onwards, be there’s lot to that

it’s if you -- ship, remember Arctic. take the our broadly, Now the is newer the our that in Endurance -- summer the ship,

the American ships The is four are Our in Orion Explorer South Alaska. in in the is Arctic. The Pacific.

way that stressed obviously. or would by areas are of be in we’re let’s Coast or I concerned. way, we the Europe So large on Mediterranean, COVID. we way concerned are terms are populations, the places still way if voyages mean the I really in less say in mean, human there all more had concerned. I’m of I West where

-- trying and answer trying into reach a ball unclear. clearly to like out crystal is figure We’re that’s an this

those And However, of a great shift some geography we geographies. matters can deal.

I’ll give So think and this example, key. you interesting I is just an

of realized Zealand, to across itinerary. this are days. completely voyages these that two the cost to finishing Western we XX-day XX we on a departures voyages Two, We of full. and not because Argentina in One We down changing could Antarctica the selection from people was our New And were thousand to New per closed. say $XXX,XXX, the we’re -- per cabin person. Antarctica, Zealand depending Zealand all had section, of these They New on webinar voyages go Antarctica, XX year. completely in peninsula had

to to bought to what compelling, anyway something you geography, sub- different, it’s we sort in Falklands that’s them Zealand, travel of Antarctica fine. most want We’re -- South still not were you’re going and the and going but Antarctica said, other And we wanted this absolutely, to concentrate Georgia to who And go. were go, islands. equally we’re and and of to willing we’re to go go. New going going to that’s offering who is and Yes,

terms So this of is alternative enormous flexibility. is of compelling. -- bit we we a I long I equally a so so reason good it’s and and in to amount the there’s answer, an how do important you itineraries shift feel And latitude of do sorry, can but have if mean asked if I’m an question

I a So have if if in where a use a We certain can in And and a ships constantly problem. on B in go you’re a We wherever a that mean with we stuck accordance circumstances. slots city with you in of you looking have dock got day, situation you you’ve And to constantly pretty don’t miss we essence anywhere. have slot, a want. constantly and -- are much have C to plan a at we how these are external terms landscape, move we plan the slot.

Alex Fuhrman

Great. really you. helpful. Thank That’s


comes Deutsche Bank. Your of Chris line the of question Woronka next from

Chris Woronka

for a some your work potentially ask of kind any to folks experience. efforts to trying have who one wanted any how you bigger been the to around people? some marketing done do gauge there And I they’re guys. loyal morning Is cruise looking different you the now to if those get Good Hey. have direct way understand of opportunity brands. of or to may to post-COVID

Sven Lindblad

question. great a that’s also, That’s Yeah.

as our well, travel One this as of financial travel in they advisors, now a I always the to felt really to them of not bode today, a What think large going a fact attracted advisor discussed, that’s more And think realized was any over shift believe, which in during act we’ve I during I’ve something than relationship is sorts this will I any and saying large are many I favor. well subject. with something perspective but and become important don’t in because would just with. the denigrate a people going from to our in attractive. people, learned refer to again this period important really, And acceleration something idea going they I that shape critical period lower. I our the or are that really, is we’ve way, to and agents, their to important. was They conversations being that’s less really community that’s in to about are had just way, And just is mass have fully I way situation, And an trade instrumental really them, may travel advisor to want advise is it’s in of like people obviously on, really act, nurture. going of or isn’t of do of People very real crowds going certainly their significant. they of I sort that heard they way I finances. relationship had to realized. COVID that which And opportunities mean, and change in mass to people a great over in with things personally act to gathering they less and a awakening their the just I’m It’s some clients, And and deal they an this, preferences. are it’s people that sort And of life. relationship we a cruise travel be recognize something form, is and they’re ship. of critical be

Craig Felenstein

new especially have I’ll add guests the of versus it’s look between time. thing when being that rescheduled, to the that at Chris, down guests. pretty percentage we’re And been us that bookings for this out new during now also but much new middle previously, here split right new of getting are that nice one folks is in bookings that see, guests is other you Hey the

top seeing to with some of we natural Sven said So are travelers. some the interest of the third-party be of we’re work that on doing just going inbound

Sven Lindblad

the as communication, rebranding, our only marketing, completely that following the specific year a focusing one critical piece sort example, getting but every for and places. developing wild want of But Obviously, not the of in it, will, our, we’re catalog, avenue. are I that’s rebranding, illustrate in back avenue. our the to into that not that, to reinventing of Adding just our if and, is and completely with relationship and on year terms in emphasis after, year different like sort launches you a that we

a combination think potent the size and combination geography the So I mix. of is very of

Chris Woronka

paying when that economics hopefully, think whether April the some a some to I away. of dramatically as all in still And you probably you then before, starting a for the first testing eventually, things to modeling it’s do? just different we trade of think great of for go up But know and the quarters? going about change is change again. are X it and And the, be or or color. they and if be of number you will protocols place about months the to you, think it sailing that margin out, that profile get again that and who’s other have Appreciate But you’re, about kind does

Craig Felenstein

that it sense of ultimately are will when ships the we they certainly part ready planned makes up where Certainly, factor economics there’s and nothing get to in you to get get start-up that are the and crew they all take that us. or ultimately a guests, down we gate and running additional sail When going to happen couple for to in be the of then where then process, of cost are overall for them and haven’t ships sail out the to things ships from not. and the the to need going whether to the

capabilities. geographies to you costs. potentially. the too may be captains more require ordinary. going shouldn’t Certain planes start will pull are require Certain geographies, out additional medical to off, that There some service. So depending of are when be, decide geographies Certain to going out geographies some on charter of

a your I term dramatically. short say margins in So would albeit the will bit not impacted, be little too

significantly XX%. think in be at these still general, operate You’ll profitable. When you ships well margins of gross majority our about the ships over

very then dissipate operate still And these high So those to costs we margins would on ships expect them. over time. certainly when we will have

historically. where to places out So I years look you margins be get been year X would the when and expect the impacted. X, should to But to back we first we’ve


further no are there Gentlemen, questions. Instructions] [Operator

Craig Felenstein

questions. if for look to the And connecting over you, you you Thank today. forward thank next have operator. days few you. joining us And everybody we Thank additional

Sven Lindblad

you. Thank


concludes conference call. This today’s

now may disconnect. You